Government participation in spending PPPs project must be aggressiveBy Jason de Asis

SENATE OFFICE, Manila, December 2, 2010-The issue of public-private partnerships (PPPs) trumpeted loud so many times and not new to me. I found it compelling to join the discussion with Sen. Ralph G. Recto, chair of the Senate ways and means committee when he hits the national government for the safeguard and welfare of the people to engage much responsibility in the PPPs involving big-ticket infrastructure projects.

Well I’m impressed a little bit, when Recto issued his statement that it would be easier, more convenient and a lot cheaper if the government frontloads its anticipated subsidy to PPP projects aimed at providing essential government services like toll roads, mass transit system and expressways.

I agree with him when Recto showed his intents by giving piece of advice that the government participation in the projects should not be limited to the sovereign guarantees it can provide to the private sector partner.

As far as I know, PPP can be defined as an arrangement between our government and the private sector to deliver public infrastructure or services rendered in a contractual basis. I agree with Recto that we end up paying more for a project at a later time, adding that more people are burdened for paying a higher cost for the use of these services.

Therefore if the government, at the onset of an infrastructure project develops with the private sector owning half or more of the equity in the venture, it can dictate the resulting price of the service the project will provide the people.

I do believe that the 250 percent increase in toll fees can be cut in half if the national government owned half of the South Luzon Expressway (SLEX) and it will not burden the people using the main thoroughfare too much.

The government should work to make its services affordable to the majority of the populace; hence it should not make profits from the services they provide to the people, and that he is in favor of building infrastructure projects through local funding or entirely on public funds.

If the government can fund these projects it would be faster and cheaper and contracting would be minimized to avoid disadvantages to the government.

I further agree in the case of the Metro Rail Transit 3 (MRT 3), which is a build-lease-transfer (BLT) project where the government ended up paying high price for the subsidy it gives to the mass transit system by virtue of the BLT agreement and it should not cost us much to build these projects and exorbitant fees should not be charged for the use of the services and that if the government owned half of the portion in the venture to build the project then the price of the use of these infrastructures can be cut in half.

However, it’s too late to say that PPP project is a success. The government needs time to prove that PPP project promises will happen and not to end in disappointment. What I am talking about is that the detail was there where the Aquino administration presented its plans to drive the country next year and allotted some P148 billion for infrastructure projects and that excludes the P15 billion earmarked as a strategic support fund for PPP projects.

I am not saying that with just a click of my fingers everything will be fixed overnight. Of course a lot of marketing strategies should be undertaken by the government to get support from the private sectors. Yuletide season is coming…dedicated commitment should be there always. “Hindi natin kailangan ng pa-tulog-tulog kahit pa mag-pasko at mag-bagong taon.” The government economic team should be aggressive in finding ways to solve problems and other dilemma that might happen in the near future.

The government should bring the PPP to the investor and should get reasonable return of investment. Can the government do it? As far as I know investors are “sigurista”. Investors need protection to ensure the success of PPP. They will never put into risk their investment. I am sure of it, never, after so many years of observation. Business is always a business. Sadly, I don’t want to spell it out. (Jason de Asis)